Vietnam Falling Short in Tackling Corruption, Says Party Chief

May 6 (Bloomberg) -- Vietnam’s efforts to curb corruption
have fallen short of expectations, the Communist Party said, as
state media announced the detention of four officials at
government-run Vietnam Railways.

Vietnam is prosecuting corporate corruption, with several
high-profile trials leading to death sentences. Still, the anti-graft campaign has failed to meet the expectations of the
country’s citizens, Communist Party general secretary Nguyen Phu
Trong said in the text of a speech posted on a government
website yesterday.

Graft exists in a number of sectors, including finance,
banking, land and mineral management and public investments, he
said. “Corruption is still a challenge and is one of the most
pressing issues in society,” Trong said.

Authorities detained four officials at Vietnam Railways,
including deputy general director Tran Quoc Dong, for alleged
involvement in a 16 billion dong ($758,000) bribery case, the
Tien Phong newspaper reported yesterday on its website, citing a
source it did not identify.

The persistence of corruption across the country could
deter future investment from overseas companies, according to
Fred Burke, managing partner of Baker & McKenzie (Vietnam) Ltd.
in Ho Chi Minh City.

“Corruption in Vietnam is a serious consideration for
foreign investors,” Burke, who is the representative for the
American Chamber of Commerce in Vietnam on the Ministry of
Justice’s Advisory Council on Administrative Procedure Reform,
said in an e-mail. “It comes up in all kinds of businesses.
When the consequences in today’s super-compliance minded global
enforcement environment are taken into account, the Vietnam stop
on their itinerary may just not be worth it.”

Corruption Trials

Vietnamese courts held at least 278 corruption trials last
year, while the state inspectorate uncovered at least 80 new
fraud cases involving state funds, according to a government
report in November that didn’t give comparable figures for
previous years.

Vietnam has begun a probe into Vietnam Railways to verify
media reports that officials allegedly received kickback money
from a Japanese company involved in an elevated railway project
in Hanoi, according to government statements. The major
shareholders of the company, Japan Transportation Consultants
Inc., are the consultancy arms of East Japan Railway Co. and
Central Japan Railway Co., according to JTC’s website. JTC said
it is cooperating with authorities on the issue and has formed a
third-party panel to investigate the allegations, according to a
company statement March 20.

Duong Chi Dung, the former chairman of state-owned Vietnam
National Shipping Lines, and Mai Van Phuc, its former general
director, were sentenced to death by a Hanoi court in December
after being found guilty of embezzlement.

The People’s Court of Ho Chi Minh City sentenced Vu Quoc
Hao, the former general director of Agribank Financial Leasing
Co. No. 2, and Dang Van Hai, the former chairman of a
construction company, to death in a fraud trial in November. Hao
was charged with embezzling $25 million of state property.